Payment protection insurance (PPI) was mis-sold for a variety of reasons. It was also extremely poor value for money. So much so that it has now been subject to a court case which found that the selling of payment protection insurance (PPI) contravened the consumer credit act as it created an unfair relationship between the bank and the borrower.
Commission for payment protection insurance could be 80% of the premium and was 67% on average. This meant that payment protection insurance was mis-sold as borrowers had no way of knowing that a large chunk of their premium was used to pay commissions to the bank.
Many high street banks such as Barclays, Santander, Lloyds TSB, Alliance and Leicester, Royal Bank of Scotland, as well as lenders such as Blackhorse, Welcome Finance, MBNA, Egg and others made millions of pounds in commission whilst offering clients payment protection policies that were extremely poor value for money.
As many as 48 million payment protection policies (PPI) have been sold in Scotland, England, Ireland and Wales and many borrowers have now claimed compensation. However as many as 20% of claims have been underpaid and a review of past payment protection insurance (PPI) claims may earn the borrowers additional moneys. Time is running out to make a payment protection insurance (PPI) claim and borrowers are being urged to act now.